Islamic finance to play a key role in Africa

The 2nd Annual Islamic Banking Summit Africa (IBSA 2013), which opened today at the Djibouti Palace Kempinski, Djibouti, saw more than 350 leaders in the international Islamic banking and finance industry engage in critical discussions that focused on capturing the growth opportunity for Islamic finance and Takaful in Africa.

The two day event, held under the official patronage of H.E. Ismail Omar Guelleh, President of the Republic of Djibouti and Head of Government and supported by the Central Bank of Djibouti, kicked off today with an inaugural address by H.E. Ahmed Osman, Governor of the Central Bank of Djibouti. The inaugural address was immediately followed by a special address by H. E. Dr. Mohamed Khair Ahmed El Zubair, Governor, Central Bank of Sudan. The inaugural session assessed the progress and development of Islamic finance in Africa and discussed key government and regulatory initiatives that are required to support the further development of Islamic finance in Africa.

The inaugural session was followed by a keynote plenary session which featured H.E. Khaled Mohammed Al-Aboodi, Chief Executive Officer of the Islamic Corporation for the Development of the Private Sector, the private sector arm of the Islamic Development Bank Group (IDB), Saudi Arabia, and Abdelilah Belatik, Assistant Secretary General of the Islamic Financial Services Board (IFSB). The keynote plenary session discussed key strategies for capacity building and how to best position Islamic finance as a catalyst for a new wave of economic development in Africa.

Islamic finance to play a key role in Africa

H. E. Ismail Omar Guelleh, President of the Republic of Djibouti and Head of Government also delivered a special presidential address at the 2nd Annual Islamic Banking Summit Africa (IBSA 2013).
Moderated by Adnan Halawi, Product Manager, Zawya Islamic Finance, the Power Debate featuring Amman Muhammad, Chief Executive Officer of First National Bank (FNB) Islamic Banking, South Africa; Hirsi Dirir, Chief Executive Officer of Dahabshil Bank International; Khalid Al Qattan, First Vice President-Head of Treasury & Investments of Al Baraka Banking Group; Sulaiman Al Harthy, Group General Manager of Meethaq Islamic Banking Group; Yahya Hussein Mohamed, Assistant General Manager of Salaam African Bank; and Ehsaan Ahmed, Head of Global Transaction Services and SME at Noor Islamic Bank, Dubai, the Power Debate session discussed key initiatives to strengthen Islamic finance’s links to the real economy in Africa and connect Africa to the broader world of Islamic finance.

Speaking at the Power Debate Session, Amman Muhammad, Chief Executive Officer of First National Bank (FNB) Islamic Banking, South Africa said, “The growth potential for Islamic finance in Africa is very exciting, due to the continent’s large Muslim demographic, dynamically growing economies and improved regulations in key markets. Strong economic growth over the last few years – with the promise of even more significant growth rates in future, enhanced human resource development, and the promotion of enhanced private sector growth are some of the factors that have resulted in a spike in the number of middle-class in Africa.”

“This trend is expected to boost consumer spending, creating further demand for retail banking products”, Muhammad said. “The international Islamic finance industry is also looking for new high-growth markets to invest their funds, so many key factors are now aligning for the Islamic banking and finance industry on the continent. International gatherings such as the annual Islamic Banking Summit Africa (IBSA) play a key role in not only highlighting the growth opportunities for the industry in Africa, but will also create a link between Africa’s Islamic finance industry and the rest of the Islamic finance world. I am delighted to be a part of this important event.”

A similar view was expressed by Hirsi Dirir, Chief Executive Officer of Dahabshil Bank International who said that, “Africa is embracing Islamic finance on a significant scale as countries across the continent seek to tap cash-rich Middle Eastern investors to finance their large infrastructure and economic development programmes.

Though Islamic finance in Africa is still in its early stages of development, the use of Islamic finance on the continent will grow further as several North and Sub-Saharan African countries are beginning to address the legal and regulatory obstacles to Islamic finance by putting in place the necessary measures.”

“However, this is only the first step towards tapping the enormous growth potential for Islamic finance on the continent and much still needs to be done”, Dirir added. “Any economy vying to be an Islamic finance hub for the continent must focus on creating an economic environment conductive for Islamic finance to grow, invest in human capital development and develop a strong capital market infrastructure.”

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